Jason Calacanis is hoping to increase user generated content at his “human search engine” Mahalo with a new revenue sharing model that lets users split the site’s profits.
The two year web directory announced the changes at New York Tech Meetup on Tuesday. According to Calacanis:
“We need to get out of the page creation business and move to the next level.”
Until now, entries on Mahalo were created by a small team of paid staffers. Now, any user can claim a topic, maintain and esentially own it. But unlike the Wikipedia model, where users create and update pages for free, Mahalo is letting users in on the profits of their labor, with a 50/50 split of the ad revenue on created pages.
The earnings may not be great. According to Calacanis, only about a third of its pages earn over $10 a year in revenue, but some go viral. A page on the 2009 stimulus package brings in about $3,000 a month according to the company. The average page on Mahalo makes between $20-50 a year.
But Calacanis is hoping the new changes will create a “gold rush mentality” on the service, with individuals flocking to the site to create and maintain pages on high-traffic topics in the news cycle that might go viral and earn them money.
The site’s new “page editor” will now make it easier to create pages, with drag and drop features instead of the Wiki code formerly used. Calacanis is also hoping that the new model will encourage growth and the value of Mahalo content.
Calacanis tells Ars Technica: “We built 100,000 pages, and sort of hit a wall. We needed something more transformative to build beyond where we are now.”
Mahalo attracted 5.6 million unique visitors last month, but Calacanis is hoping the new revenue shift will be a tipping point for the company. He told The Los Angeles Times: “We really want to get to the teens or 25 million uniques — that’s
when the service becomes what I would say is very, very profitable,”
Forrester Research analyst Jeremiah Owyang calls the new model essentially “affiliate marketing,” and noted that the new pay model may run into problems with disclosure. But the real key for Calacanis is growing the base of active users and readers on the site.
If Mahalo is able to get consumers addicted to using Mahalo independently, and not just when its answer come up in a Google search, the site will have a far more steady future.
According to TechCrunch: “People who come from search engines tend to be drive-by traffic. They
look at 1.5 pages then leave. People who come directly or through
referring sites look at 4 to 5 pages per visit.”